With claims litigation and legal spend surging, claims executives are under pressure to control costs and reduce risk. Take commercial auto insurers' liability, for example. Liability losses almost tripled in the past decade, and median jury verdict monetary awards nearly doubled, the Insurance Information Institute finds.
The Insurance Research Council (IRC) also reports that the average insurer payment per insured vehicle grew 31 percent for bodily injury claims and 26 percent for personal injury protection no-fault claims during a nine-year period. Another IRC survey underscores significant increases in large medical malpractice verdicts.
The reasons for these increases are varied — from changes in jurors’ perspectives to enactment of more plaintiff-friendly statutes to a boost in large nuclear verdicts.
What claim executives need is technology that can analyze data and allow organizations to understand their costs while finding ways to reduce risks that can affect the bottom line.
Control ‘more important than ever’
Numerous recent factors are leading to increases in claims volume, including inflation, economic pressures and the trend toward bigger verdicts, says Jenny Snyder, claims litigation manager at Ohio Mutual Insurance Group.
"It's more important than ever for us to mitigate our risks and control costs,” she adds. “We need to continue to focus on and counteract this trend.
These trends started to emerge before COVID-19, but post-pandemic losses continue to escalate, Snyder says.
Ohio Mutual relies on technology and data analytics to hone in on opportunities where the company can manage litigation expenses and find the most effective law firm, she adds, a view shared by many GCs. The carrier uses the legal platform Assure Legal Insights from DXC, a company with broad experience guiding the insurance industry on claims and related cost management.
The DXC Assure Legal Insights platform provides access to litigation outcomes, judicial analytics and legal spend benchmarking. This all-in-one tool includes data from U.S. federal courts and almost all state and local courts allowing users to learn how a particular judge ruled in similar matters, how attorneys fared before that judge and how long it took to resolve a particular matter.
A way to sharpen strategy
Snyder and her team use DXC Assure Legal Insights to review billing practices, billing cycles and the company’s budgets. Those reviews allow Ohio Mutual to look at average case duration and outcomes, which helps reduce costs. Average verdicts in a given venue also help refine strategy.
And by identifying and partnering with defense counsel, the carrier determines the best approach to protect its insureds, manage risks and allow for a fair claim resolution.
Snyder says as data analytics become more relied on, users get a “holistic perspective with how loss control, product data and claims data all interact.” By using these tools, she continues, Ohio Mutual is afforded “a high-level overview of our results” that is easily accessible and digestible, rather than having multiple reports that take time.
Previously, she says, it was harder to see trends in particular venues or with certain counsel.
The most effective way carriers can keep litigation costs down, Snyder advises, is to stop unnecessary litigation before it starts. This is done by properly investigating, evaluating and settling claims in a timely and accurate fashion. Some claims, however, are not able to be resolved without litigation and with those claims, carriers must be proactive in their discussions with counsel, she says.
Learn more about DXC Assure Legal Insights.